EMPLOYMENT AGREEMENT
Exhibit
10.3
THIS
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (the “Agreement”) is entered into on December 17,
2007 (the “Effective Date”), by I-TRAX, INC., a Delaware
corporation with its principal business offices located at 0 Xxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxxxxxx 00000 (the “Company”), and
X. XXXXX XXXXXX, an individual residing at 0000 Xxxx Xxx Xxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000 (“Executive”).
The
Company and Executive are parties
to an Employment Agreement effective as of February 14, 2005 (the
“Original Agreement”). The parties now wish to amend
and restate the Original Agreement in the form of this Agreement.
In
consideration of the mutual
covenants and premises contained in this Agreement, and other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged
by
the Company and Executive, the Company and Executive agree as
follows:
1. Term
of Employment. Upon the terms set forth in this Agreement, the
Company employed Executive and Executive accepted employment with the Company
for the period that commenced on February 15, 2005 and will end on February
15,
2008 (such period, the “Original Term”), unless sooner
terminated in accordance with the provisions of Section 4 below. Upon
the expiration of the Original Term, the term of the Executive’s employment will
automatically extend until terminated in accordance with the provisions of
Section 4 below (the “Extended Term,” and together with the
Original Term, the “Term”).
2. Title
and Capacity. Executive will serve as the Chief Executive Officer
of the Company, and will perform the duties commensurate with such position
and
such other duties commensurate with such position as the Company’s Board of
Directors (the “Board”) may assign to
Executive. Executive will devote attention and energies on a
full-time basis to the above duties, and Executive will not, during the Term,
actively engage in any other for profit business activity, except Executive
may,
so long as such activities do not violate the terms of Section 6.1 or impair
Executive’s performance of his duties under this Agreement: (a) serve as a
director of up to two entities other than the Company, (b) consult other
entities in the manner and to the extent provided by Executive prior to
Executive’s employment by the Company.
3. Compensation
and
Benefits.
3.1 Base
Salary. On the Effective Date, the Company is paying Executive an
annual base salary of $386,239.50 (such salary, as adjusted from time to time,
the “Base Salary”). The Compensation Committee of
the Board (the “Compensation Committee”) will complete an
annual review of Executive’s performance and will, based upon the results of
such review, increase the Base Salary for any subsequent year of the
Term. In addition, the Company will pay Executive a bonus for each
complete or partial fiscal year during the Term (the
“Bonus”). The Bonus will be determined by the
Compensation Committee upon consultation with Executive.
3.2 Payment
in Installments. The Company will pay Executive the Base
Salary
in
periodic installments in accordance with the Company’s general payroll
practices, after withholding for all Federal, state and local taxes and other
required deductions. The Company will pay the Bonus within 90 days of
the end of the end of each calendar year.
3.3 Stock
Options.
(a) Effective
February 14, 2005, the Company granted Executive options to acquire 400,000
shares of the Company’s common stock at an exercise price of $1.41 per share
under the Company’s 2001 Equity Compensation Plan (the “Plan
Options”). The Plan Options are exercisable as follows:
100,000 shares on February 14, 2005; 100,000 shares on February 14, 2006; and
the balance in eight equal, quarterly installments that began on May 14,
2006.
(b) The
Plan Options will accelerate and be vested and exercisable in full in accordance
with the terms of the stock option agreement between the Company and Executive
for at least 12 months: (1) if the Company terminates Executive’s employment
under Section 4.3 for any reason other than for cause; (2) if Executive
terminates Executive’s employment under Section 4.5(b) for good reason; (3) in
the event of a “Change in Control,” as such term is defined in the Company’s
2001 Equity Compensation Plan; or (4) if Executive dies or is Disabled while
on
the Company’s business or as a result of Executive’s performance of his duties
under this Agreement. Except as provided in this Section 3.3, the
Plan Options are in all respects subject to the terms of the stock option
agreement between the Company and the Executive covering the Plan
Options.
3.4 Benefits;
Insurance and Indemnity.
(a) Provided
Executive meets and continues to meet the full-time and any and all other
eligibility requirements set forth in the Company’s Employee Manual and in the
applicable benefits plans sponsored by the Company, the Company will make
available to Executive fringe benefits, retirement, health and welfare benefits
plans, policies and arrangement as are in effect from time to time and made
available to senior executives officers of the Company, subject to employee
cost
sharing provisions and other provisions of such benefits and benefit plans
(collectively, the “Benefits”). Notwithstanding the
preceding, the Company may change, modify, amend, eliminate, or terminate the
Benefits or change the employee cost sharing provisions applicable to the
Benefits, and if the Company does so, thereafter Executive will be entitled
only
to then available standard full-time employee Benefits made available to other
senior executive officers of the Company.
(b) During
the Term, the Company will maintain directors and officers insurance with
coverage of not less than $5,000,000 per occurrence, and indemnify Executive
to
the fullest extent provided under the Company’s certificate of incorporation and
by-laws.
3.5 Paid
Time Off. Executive is entitled to 25 paid time off days per year
in accordance with the Company’s Executive PTO policy, as amended from time to
time, and taken at such times as may be approved by the Compensation Committee
or the Chairman of the Board.
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3.6 Expenses.
(a) The
Company will reimburse Executive for all reasonable travel, entertainment and
other expenses incurred or paid by Executive in connection with, or related
to,
the performance of his duties under this Agreement in accordance with the Travel
and Expense Policy published by the Company’s Finance Department, as amended
from time to time.
(b) The
Company will pay for or reimburse Executive for reasonable costs and expenses
(including travel) of an annual physical examination performed by a physician
and a location selected by Executive in his sole discretion.
(c) The
benefits and reimbursements made pursuant to Section 3.6(a) and (b) are subject
to the following restrictions: (1) the amount of benefits provided or expenses
eligible for reimbursement during any calendar year will not affect the benefits
provided or expenses eligible for reimbursement during any other calendar year;
and (2) the Company will reimburse an eligible expense as soon as practicable
after Executive requests such reimbursement, but not later than the December
31
following the calendar year in which the expense was incurred.
4. Employment
Termination. The employment of Executive by the Company under
this Agreement will terminate upon the occurrence of any of the
following:
4.1 Cause. At
the election of the Company, for “cause” as defined below, immediately upon
written notice by the Company to Executive. “Cause”
for termination is deemed to exist by reason of (a) any action by Executive
resulting in the conviction of Executive of, or the entry of a plea of guilty
or
nolo contendere by Executive to, any crime involving moral turpitude, any
felony, or any misdemeanor involving misconduct or fraud in business activities,
(b) any breach of a fiduciary duty to the Company involving personal profit,
(c)
Executive’s willful failure to perform his duties under this Agreement,
(d) Executive’s willful misconduct or gross negligence in the performance
of his duties under this Agreement, (e) any action by Executive that
violates Section 6, or (f) repeated refusals by Executive to comply with
the reasonable directives of the Board; provided, however, that
the Company may terminate Executive’s employment under Sections 4.1(c), (e) or
(f) above only after Executive fails (x) to commence and continue to correct
or
cure each specific instance comprising cause within 10 days of receipt by
Executive of written notice of the Board identifying each instance constituting
cause or (y) to correct or cure each identified instance within 45 days of
receipt of such notice, if capable of being corrected or cured within such
period.
4.2 Without
Cause. At the election of the Company, at any time, upon 30 days
written notice for any reason whatsoever other than for cause.
4.3 Death
or Disability. Upon Executive’s death or 30 days after
Disability. “Disability” or
“Disabled” means Executive is unable, due to a physical
or
mental disability, to perform the duties contemplated under this Agreement
for a
period of three consecutive months or for a cumulative period of four months
within any six consecutive months. A physician
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satisfactory
to Executive and the Company will determine if Executive is
disabled. If Executive and the Company cannot agree on a physician
within 30 days of either party’s written notice to the other, Executive and the
Company will each select a physician, who will together select a third
physician. The determination of the physician(s) as to Disability
will be binding on all parties.
4.4 Termination
by Executive. At the election of Executive: (a) at any time if
his health should become impaired to an extent that makes the continued
performance of his duties under this Agreement hazardous to his physical or
mental health or his life, as certified by a physician designated by Executive
and reasonably acceptable to the Company; (b) for “good reason” upon
delivery of written notice of such “good reason” to the Company; or
(c) upon 90 days written notice of termination. “Good
reason” means: (1) the failure by the Company to continue Executive in
the position of Chief Executive Officer (or such other senior executive position
as may be offered by the Company and which Executive may in his sole discretion
accept); (2) material diminution by the Board of Executive’s responsibilities,
duties or authority as Chief Executive Officer of the Company (or such other
senior executive position as may be offered by the Company and which Executive
may in his sole discretion accept) or assignment to Executive of any duties
inconsistent with Executive’s position as Chief Executive Officer of the Company
(or such other senior executive position as may be offered by the Company and
which Executive may in his sole discretion accept); (3) failure by the Company
to pay and provide to Executive the compensation provided in Section 3.1 above,
which failure is not cured within 30 days after written notice of such failure
is delivered by Executive to the Company; (4) requiring Executive to be
permanently based anywhere other than within 25 miles of his present home in
Unionville, Pennsylvania (excluding business related travel as required by
the
Company’s business); or (5) a “Change in Control,” as such term is defined in
the Company’s 2001 Equity Compensation Plan; or (6) any other material breach of
this Agreement by the Company, which breach, if capable of being cured, is
not
cured within 30 days after written notice of such breach is delivered by
Executive to the Company.
5. Effect
of Termination.
5.1 Termination
for Cause. If the Company terminates Executive’s employment for
cause under Section 4.1, the Company will pay to Executive the Base Salary,
Bonus and Benefits otherwise payable to Executive under Sections 3.1, 3.2
and 3.4, pro rata through the last day of Executive’s actual
employment by the Company.
5.2 Termination
Without Cause.
(a) If
at any time during the Term (i) the Company terminates Executive’s employment
under Section 4.2 for any reason other than for cause, or (ii) Executive dies
or
is Disabled while on the Company’s business or as a result of Executive’s
performance of his duties under this Agreement, the Company will pay to
Executive or his estate, as applicable, (1) severance equal to 24 months of
base
salary then applicable under Section 3.1, (2) an amount equal to two times
the
average, and if necessary annualized, Bonus paid to Executive for the most
recent two years of the Term, and (3) an amount approximately equal to the
amount Executive would be required to pay to maintain full-time health benefits
under COBRA while receiving severance.
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(b) Executive
acknowledges that if Executive’s employment is terminated pursuant to Section
4.2, (1) the payments under Section 5.2(a) and (2) the rights of Executive
with
respect to Plan Options under Section 3.3(b), represent the total obligation
of
the Company to Executive under this Agreement. Further, Executive is
not required to mitigate damages to receive the payments set forth in Section
5.2(a).
5.3 Termination
for Death or Disability. If Executive’s employment is terminated
by death or because of Disability under Section 4.3 other than as provided
in
Section 5.2(a), the Company will pay to the estate of Executive or to Executive,
as applicable, the Base Salary and benefits otherwise payable to Executive
under
Sections 3.1, 3.2 and 3.4 above through the end of the month in which
termination of Executive’s employment because of death or Disability
occurs.
5.4 Termination
by Executive.
(a) If
Executive terminates Executive’s employment under Section 4.4(a) for reasons of
health, the Company will pay to Executive the Base Salary, Bonus and Benefits
otherwise payable to Executive under Sections 3.1, 3.2 and 3.4 pro rata
through the date of termination.
(b) If
Executive terminates Executive’s employment under Section 4.5(b) for good reason
at any time during the Term, the Company will pay to Executive (1) severance
equal to 24 months of base salary then applicable under Section 3.1, (2) an
amount equal to two times the average, and if necessary annualized, Bonus paid
to Executive for the most recent two years of the Term, and (3) an amount
approximately equal to the amount Executive would be required to pay to maintain
full-time health benefits under COBRA while receiving severance.
(c) Executive
acknowledges that if Executive’s employment is terminated pursuant to Section
4.4(b), (1) the payments under Section 5.4(b) and (2) the rights of Executive
with respect to Plan Options under Section 3.3(b), represent the total
obligation of the Company to Executive under this Agreement. Further,
Executive is not required to mitigate damages to receive the payments set forth
in Section 5.4(b).
(d) If
Executive terminates Executive’s employment under Section 4.4(c), the Company
will pay to Executive the Base Salary, Bonus and Benefits otherwise payable
to
him under Sections 3.1, 3.2 and 3.4 pro rata through the last day of
his actual employment by the Company.
5.5 Severance
Payments Terms. The Company will pay the severance benefits under
this Section 5 to Executive in substantially equal periodic installments in
accordance with the Company’s general payroll practices, beginning on the first
payroll date following the date of Executive’s termination of employment and
ending when the applicable severance period under Section 5
ends. Notwithstanding the foregoing, if Executive is a
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“specified
employee” within the meaning of Section 409A(2)(B)(i) of the Internal Revenue
Code (“Code”), the Company will not pay severance upon
Executive’s termination of employment pursuant to Section 5 (other than by
reason of Executive’s death), during the first six months following Executive’s
termination date and all payments that would have otherwise been made during
that period will be paid to Executive on the first payroll date following the
expiration of six full months following Executive’s termination
date.
6. Non-Competition,
Non-Solicitation and Confidentiality.
6.1 Non-Competition. During
the Term and during the Post Termination Non-Competition Period (as defined
below) after the termination of the Term, Executive will not, including through
an Affiliate (as defined in Rule 12b-2 promulgated pursuant to the Securities
Exchange Act of 1934, as amended), directly engage in the corporate health
care
management business in which the Company or its Affiliates are engaged in at
any
time during the Term (the “Business”) in the United
States. Each of the following activities, without limitation, are
deemed to constitute engaged in the Business: engaging in, working
with, maintaining an interest in (other than interests of less than 3% in
companies with securities traded either on the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market, the Nasdaq SmallCap Market
or traded over-the-counter and quoted on the Bulletin Board), advising for
a fee
or other consideration, managing, operating, lending money to (other than loans
by commercial banks), guaranteeing the debts or obligations of, or permitting
one’s name or any part thereof to be used in connection with an enterprise or
endeavor, either individually, in partnership or in conjunction with any
individual, partnership, corporation, limited liability company, association,
joint stock company, trust, joint venture or any other form of business
organization, unincorporated organization or governmental entity (or any
department, agency or subdivision thereof) (each, a “Person”),
whether as principal, director, agent, shareholder, partner, employee,
consultant, independent contractor or in any other manner whatsoever, any Person
in the Business. “Post Termination Non-Competition
Period” means the longer of one year and the period during which
Executive is receiving severance under this Agreement.
6.2 Non-Solicitation. During
the Term and during the Post Termination Non-Solicitation Period (as defined
below) after the termination of the Term, Executive will not, directly or
indirectly, and no Person (including an Affiliate) over which Executive
exercises control (whether as an officer, director, individual proprietor,
holder of debt or equity securities, consultant, partner, member or otherwise)
(a) solicit or engage or employ or otherwise enter into any agreement or
understanding, written or oral, relating to the services of any Person who
is
known or should be known by Executive to be then employed or to have been
employed within the preceding six months by the Company or its Affiliates,
(b)
take any action which could be reasonably expected to lead any Person to cease
to deal with the Company or its Affiliates or (c) solicit the business of,
enter into any written or oral agreement with or otherwise deal with any
supplier of goods, products, materials or services in competition with the
Company or its Affiliates or solicit the business of customers of the Company
or
its Affiliates who were such at any time during the two-year period preceding
Executive’s last date of employment, except on behalf of businesses in which
such party would then be permitted to engage directly without violating this
Section 6. “Post Expiration Non-Solicitation
Period” means the longer of one year and the period during which
Executive is receiving severance under this Agreement.
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6.3 Confidentiality. During
the Term and for a period of five years after the termination of the Term,
Executive will treat as trade secrets all Confidential Information (as defined
below) known or acquired by Executive in the course of any affiliation Executive
has with the Company or its Affiliates and will not disclose any Confidential
Information to any Person not affiliated with the Company except as authorized
in writing by the Company. “Confidential
Information” means any information relating to the relationship of the
Company or its Affiliates to their customers (including, without limitation,
the
identity of any customer), the research, design, development, manufacturing,
marketing, pricing, costs, capabilities, capacities and business plans related
to the Business, the financing arrangements of the Company, or the financial
condition or prospects of the Company; inventions, products, processes, methods,
techniques, formulas, compositions, compounds, projects, developments, plans,
research data, clinical data, financial data, personnel data, computer programs,
software, including source code, object code, operating systems, bridgeware,
firmware, middleware or utilities and customer and supplier lists and any other
confidential information relating to the assets, condition or business of the
Company or its Affiliates. Notwithstanding the foregoing, Executive
will have no obligation with respect to (a) information disclosed to
Executive by a Person who does not owe a duty of confidentiality to the Company
or its Affiliates; or (b) information which is in the public domain and is
readily available; or (c) information where disclosure is required by law
or is necessary in connection with a claim, dispute or litigation to which
Executive is or becomes a party and the Company is given ten business days
prior
written notice of the intent to make disclosure.
6.4 Injunctive
Relief. The restrictions contained in this Section 6 are
necessary for the protection of the business and goodwill of the Company and
its
Affiliates and are considered by Executive to be reasonable for such
purpose. Executive acknowledges that a breach or threatened breach by
Executive of the covenants contained in this Section 6 would cause the Company
irreparable harm and that the extent of damages to the Company would be
impossible to ascertain and that there is and will be available to the Company
no adequate monetary damages or other remedy at law to compensate it in the
event of any such breach. Consequently, in the event of a breach of
any such covenant, in addition to any other relief to which the Company is
or
may be entitled, the Company may seek, as a matter of course, an injunction
or
other equitable relief, including the remedy of specific performance, to enforce
any or all of such covenants by Executive, his or her employer, employees,
partners, agents or any of them.
6.5 Modification
of Covenants. In the event an arbitrator, court or governmental
agency or authority determines that any provision of Section 6 is invalid by
reason of the length of any period of time or the size of any area during or
in
which such provision is effective, such period of time or area will be
considered to be reduced to the extent required to cure such
invalidity.
6.6 Extension
of Covenant. In the event Executive violates the restrictions
contained in Section 6.1, the duration of such restriction will extend for
a
period of time equal to the period of time during which such violation
continued.
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6.7 Counter-claims. Any
claim or cause of action by Executive against the Company, whether predicated
on
this Agreement or otherwise, will not constitute a defense to the enforcement
by
the Company of the restrictions contained in this Section 6, but will be
litigated separately including, without limitation, any claim by Executive
that
Executive has not been terminated for cause pursuant to Section 4.1 above,
unless the claim and defense arise out of the same event and joinder would
be
required.
7. Inventions,
Patents and Intellectual Property.
7.1 All
Inventions made, conceived, reduced to practice, created, written, designed
or
developed by Executive, solely or jointly with others and whether during normal
business hours or otherwise, during the Term or thereafter if resulting or
directly derived from Confidential Information, will be the sole property of
the
Company. “Inventions” include inventions,
discoveries, computer programs, data, software, technology, designs, innovations
and improvements (whether or not patentable and whether or not copyrightable)
related solely to the Business and specifically exclude any such item predating
the effective date of this Agreement or any non-Company activity specifically
permitted under Section 2. Executive hereby assigns to the Company
all Inventions and any and all related patents, copyrights, trademarks, trade
names, and other industrial and intellectual property rights and applications
therefor, in the United States and elsewhere and appoints any officer of the
Company as Executive’s duly authorized attorney to execute, file, prosecute and
protect the same before any government agency, court or
authority. Upon the request of the Company and at the Company’s
expense, Executive will execute such further assignments, documents and other
instruments as may be necessary or desirable to fully and completely assign
all
Inventions to the Company and to assist the Company in applying for, obtaining
and enforcing patents or copyrights or other rights in the United States and
in
any foreign country with respect to any Invention.
7.2 Executive
will promptly disclose to the Company all Inventions and will maintain adequate
and current written records (in the form of notes, sketches, drawings and as
may
be specified by the Company) to document the conception and/or first actual
reduction to practice of any Invention. Such written records will be
available to and remain the sole property of the Company at all
times.
8.
Return of Confidential
Information. All files, letters, memoranda, reports, records,
data, sketches, drawings, laboratory notebooks, program listings or other
written, photographic or other tangible material, in each event, containing
Confidential Information, whether created by Executive or others, which come
into Executive’s custody or possession, are and will be the exclusive property
of the Company to be used by Executive only in the performance of his duties
for
the Company.
9.
Cooperation. At any time during the Term or thereafter,
Executive will reasonably cooperate with the Company in any litigation or
administrative proceedings involving any matters with which Executive was
involved during Executive’s employment by the Company. The Company
will reimburse Executive for reasonable time and expenses, if any, incurred
in
providing such cooperation.
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10. Notices. All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing, and may be given by a party hereto by (a)
personal service (effective upon delivery), (b) mailed by registered or
certified mail, return receipt requested, postage prepaid (effective five
business days after dispatch), (c) reputable overnight delivery service,
charges prepaid (effective the next business day) or (d) telecopy or other
means of electronic transmission (effective upon receipt of the telecopy or
other electronic transmission in complete, readable form), if confirmed promptly
by any of the methods specified in clauses subparagraphs (a)-(c) of this Section
10, to the other party at the address shown above, or at such other address
or
addresses as either party shall designate to the other in accordance with this
Section 10.
11. Non-Disparagement. During
the Term and for five years thereafter, neither the Company nor Executive will
disparage, deprecate, or make any negative comment with respect to the other
party or its Affiliates or their respective businesses, operations, or
properties.
12. Pronouns. Whenever
the context may require, any pronouns used in this Agreement include the
corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns include the plural and vice versa.
13. Entire
Agreement. This Agreement, and such other agreements, schedules
and exhibits as are referenced in this Agreement, constitute the entire
agreement between the parties and supersede all prior agreements and
understandings, whether written or oral, relating to the subject matter of
this
Agreement.
14. Amendment. This
Agreement may be amended or modified only by a written instrument executed
by
both the Company and Executive.
15. Governing
Law; Consent to Jurisdiction.
15.1 This
Agreement shall be construed, interpreted and enforced in accordance with the
laws of the Commonwealth of Pennsylvania, notwithstanding any contrary
application of conflicts of laws principles.
15.2 Each
of the Company and Executive consents to the jurisdiction of all Federal and
state courts located in the Commonwealth of Pennsylvania which have jurisdiction
over any disputes arising under this Agreement. Service of process in
any action or proceeding commenced in a court located in the Commonwealth of
Pennsylvania may be made by written notice as provided in Section
10.
16. Successors
and Assigns. This Agreement will be binding upon and inure to the
benefit of both parties and their respective successors and assigns, including
any corporation with which or into which the Company may be merged or which
may
succeed to its assets or business; provided, however, that the
obligations of Executive are personal and may not be assigned by
him.
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17. Miscellaneous.
17.1 No
delay or omission by the Company in exercising any right under this Agreement
operates as a waiver of that or any other right. A waiver or consent
given by the Company on any one occasion is effective only in that instance
and
will not be construed as a bar or waiver or any right on any other
occasion.
17.2
The captions of the sections of this Agreement are for convenience of reference
only and in no way define, limit or affect the scope or substance of any section
of this Agreement.
17.3 In
case any provision of this Agreement is invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining
provisions will in no way be affected or impaired.
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IN
WITNESS WHEREOF, the parties hereto,
intending to be legally bound, have executed this Agreement as of the day and
year set forth above.
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COMPANY:
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I-TRAX,
INC.
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By:
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/s/
Xxxxx X. Xxxxxx
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Name:
Xxxxx X. Xxxxxx
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Title:
Chairman
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Attest:
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/s/
Xxxx Xxxxxxxxx
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Name:
Xxxx Xxxxxxxxx
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Title:
Secretary
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EXECUTIVE:
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Witness:
/s/ Xxxx Xxxxxxxxx
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/s/
X. Xxxxx Xxxxxx
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